Why It’s the Perfect Season for Debt Consolidation
The Canadian interest rate isn’t going up this summer.
On July 10, 2019, the Bank of Canada (BOC) announced that the Canadian interest rate will remain unchanged this month, staying at 1.75%.
As this is the last BOC announcement until September 4, 2019, this means Canadian consumers have the summer to deal with debt.
If the Canadian interest rate increases, it means higher debt payments, higher mortgage rates, higher credit card interest, higher utility bills, and more. If your budget is already strapped — or even if you’d rather just have the money stay in your pocket — debt consolidation is the answer.
Canadian consumer debt is continuing to increase. In fact, the BOC pointed to a recent uptick in spending due to the “healthy” Canadian labour market. According to Equifax Canada, the average debt per Canadian consumer (including mortgages) reached $71,300 in Q1 2019.
Having outstanding debt can weigh you down in many ways, particularly if the interest payments add up. It can harm your credit score, hurt your ability to secure a better mortgage rate, and eat away at your budget. This is not to mention the psychological consequences, such as adding stress to your life.
Luckily, there is a solution: debt consolidation.
With interest rates remaining the same, this summer is the perfect time to consider your debt consolidation options, including:
- Taking out a secured loan based on equity and using it to pay off your outstanding debts.
- Looking into mortgage refinancing or a second mortgage, and then using the equity to pay off your other outstanding, high-interest debts.
- Filing for a consumer proposal or bankruptcy and then starting to rebuild credit right away.
The advantage of doing this sooner, rather than later, is that if interest rates do increase in the future, you will be getting a better rate now than you might if you wait to take action.
You are also creating a buffer in your budget so that if rates do resume their rise, you’ll be able to weather any increases without feeling strapped for cash.
The key is to look for financing that has a fixed interest rate — meaning it won’t vary with interest rate changes — and is payable over a fixed schedule. You want to know when your payments are due and how much they will be so you can plan accordingly.
If you are self-employed or have bad credit, you will also want to look for lenders who will accommodate your situation, such as Prudent Financial.
Prudent offers personal loans, car loans and home loans to people with bankruptcies, consumer proposals and bad credit histories across Toronto and the GTA. We also give secured loans to those who are self-employed.
Our loans are all open and repayable at any time. We offer online and same-day financing with no upfront fees.
Get a handle on debt now — and then you can relax all summer long!
Contact us today for a free debt consolidation consultation. Call 1-888-852-7647 or visit www.prudentfinancial.net.